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6 March, 11:23

Units produced 1,000 Direct materials $ 6 Direct labor $ 10 Fixed overhead $ 6,000 Variable overhead $ 6 Fixed selling and administrative $ 2,000 Variable selling and administrative $ 2 The total product cost per unit under absorption costing is:

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  1. 6 March, 12:48
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    Unit product cost = $28

    Explanation:

    Giving the following information:

    Units produced 1,000

    Direct materials = $6

    Direct labor = $10

    Fixed overhead = $6,000

    Variable overhead = $6

    Under the absorption costing method, the unitary product cost is calculated using the direct material, direct labor, and unitary total overhead.

    First, we need to calculate the unitary fixed overhead:

    Unitary fixed overhead = 6,000/1,000 = $6

    Unit product cost = 6 + 10 + (6+6) = $28
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